Clean Air Plan Allows Utah Gas Development to Move Forward

Clean Air Plan Allows Utah Gas Development to Move Forward

WASHINGTON, DC, June 9, 2011 (ENS) – The Greater Natural Buttes Area Gas Development Project in Utah, first proposed by Kerr-McGee Oil & Gas Onshore LP in 2006, has been delayed over concerns about its impacts on air quality in the Uintah Basin, already experiencing some of the unhealthiest winter time ozone levels in the nation.

Today, Secretary of the Interior Ken Salazar announced that the company and the two federal agencies involved in permitting have reached an agreement that allows the project to go forward while keeping air pollution low.

Currently there are approximately 1,000 gas wells in the Uintah Basin project area in eastern Utah.

The Kerr-McGee project would include up to 3,675 new gas wells in the basin that could potentially produce more than six trillion cubic feet of natural gas over 10 years. The company says between 1,000 and 4,000 jobs would be created over the life of the project.

But in the first two months of 2011, the Uintah Basin experienced 23 days when ozone exceeded the acceptable levels of pollution. Five of these days were considered “very unhealthy” for people.

For several months, the Bureau of Land Management and the Environmental Protection Agency have worked with Kerr-McGee to develop a plan that will reduce the project’s potential impact on air quality in the basin.

Kerr-McGee, a wholly-owned subsidiary of Anadarko Petroleum, has agreed to conduct a pilot project that will evaluate using low-emission natural gas fueled drilling rigs that cause less air pollution than the diesel fueled rigs now in use.

In addition, the company has committed to use a number of other readily available air pollution control technologies, Secretary Salazar said.

“This project has the potential to create hundreds of jobs for Utah, infuse millions of dollars into local communities, and help power our economy with natural gas as part of our nation’s comprehensive energy portfolio,” said Salazar. “I am encouraged that the BLM, EPA, and the company found a collaborative path forward that would put sensible air pollution control technologies to work as the field is explored and developed.

In the past, the BLM and EPA have been “pulling in different directions” and “took different approaches” to air quality issues of natural resource exploitation on public lands, Salazar said.

Now that a collaborative approach has been identified for jointly resolving clean air issues on public lands it will be institutionalized in a Memorandum of Understanding that is being drafted with input from the Western states.

Deputy Secretary of the Interior David Hayes will be in charge of communicating with the states. “The Memorandum of Understanding is an interagency agreement ensures good communication between the agencies and doesn’t dispute issues of air quality controls,” Hayes told reporters today. “We’ll be reaching out to governors of Western states, sharing with them draft versions, and getting their input.”

With this announcement, the BLM will publish in the Federal Register on June 10 the public notice of the air quality Supplement to the Draft Environmental Impact Statement for the Greater Natural Buttes Project.

The Supplement is available for 45 days of public review and comment. The document supplements the information and analysis contained in the Greater Natural Buttes Draft EIS, which was released for public review and comment in July 2010.

Click here to see the supplement on the BLM Vernal Field Office website.

Meanwhile, companies are developing the technology that makes it possible for Kerr-McGee to use natural gas to fuel its rigs.

In Oklahoma, SourceOne Engine Equipment is selling bi-fuel kits that can be attached to existing engines on drilling rigs in about five days. The Altronic GTI Bi-Fuel kits cut diesel fuel by 70 percent, replacing it with natural gas.

Shane Janssen, SourceOne’s vice president of sales, said natural gas can replace up to 70 percent of the diesel fuel used by drilling rigs, which can consume an average of 1,500 gallons of diesel a day.

Using natural gas from the well site can reduce fuel costs by as much as $1 million a year because it is much cheaper than diesel, Janssen told NewsOK.com in May.

Chesapeake Energy Corporation, based in Oklahoma City, the second-largest producer of natural gas and the most active driller of new wells in the U.S. also has ongoing initiatives to use more natural gas in its operations, including its drilling fleet.

The company is using blends of liquified natural gas with diesel to reduce emissions in its heavy-duty trucks, and the same technology also could be used on drilling rig engines, Norman Herrera, manager of corporate development, told “The American Oil & Gas Reporter” in May.

“If you are burning 1,400 gallons of diesel a day on a rig, and you are operating 155 rigs, and you have a cost advantage on what you are paying for the fuel,” said Herrera, “that becomes a strategic place to use our own fuel.”